NewEnergyNews

Gleanings from the web and the world, condensed for convenience, illustrated for enlightenment, arranged for impact...

While the OFFICE of President remains in highest regard at NewEnergyNews, this administration's position on the climate crisis makes it impossible to regard THIS president with respect. Below is the NewEnergyNews theme song until 2020.

Monday, February 29, 2016

TODAY’S STUDY: THE NEW ENERGY FACTS NOW

Two thousand fifteen will surely be remembered as a watershed year in the evolution of US energy, as the industry passed important milestones and the federal government finalized critical new policies. The already rapid de-carbonization of the US power sector accelerated with record numbers of coal plant closures and solar photovoltaic system commissionings, while natural gas production and consumption hit an all-time high. Concurrently, the US continued to enjoy greater benefits from energy efficiency efforts as economic growth outpaced the growth in electricity consumption.

The net result on the planet: US power sector CO2 emissions fell to their lowest annual level since the mid-1990s. The net impact on consumers: negligible to positive as prices for electricity and fuel remained low by historic standards and customer choices expanded. Perhaps most importantly, many of the key changes seen in 2015 are likely permanent shifts, rather than temporary adjustments due to one-time events.

On the policy front, major initiatives appear poised to keep the US on track toward de-carbonization in the coming decades. In August, the Obama administration finalized its Clean Power Plan regulation for the existing US power fleet. In December, the US joined with 194 other nations in France to adopt the “Paris Agreement” which includes pledges to rein in emissions over the coming decades. The year closed with Congressional approval of a major, five-year extension of key tax credits supporting new US wind and solar projects and a two-year extension of measures supporting energy efficiency. The Production Tax Credit (PTC) was also extended to cover geothermal, biomass, waste-to-energy, landfill gas, hydro and ocean energy projects that commence construction before 2017.

As in years past, the goal of the 2016 Factbook is relatively simple: to record and highlight the important developments that transpired in US energy over the prior 12 months. It also provides a look back over the past seven years, and in some cases decades, to show trends. Among the most notable developments:

• Investment in energy efficiency continues to pay dividends for the US economy.

– Energy productivity – the ratio of US GDP to energy consumed

– continues to grow, improving by 2.3% from 2014 to 2015 following a 1.1% increase the previous year. The US economy has now grown by 10% since 2007, while primary energy consumption has fallen by 2.4%. And while the shifting composition of the US economy is no doubt a driver, estimates put forward by the American Council for an Energy Efficient Economy indicate that as much as 60% of the energy intensity improvements seen since 1980 are due to efficiency gains, with only 40% the result of structural changes in the US economy.

– Within the electricity sector specifically, this “decoupling”

– a disconnection between energy consumption and economic growth

– is also visible: electric load growth in 2015 clocked in at only 0.5%, compared to a projected 2.4% increase in GDP. And since 2007, electricity demand has been flat, compared to a compounded annual growth rate of 2.4% from 1990 to 2000.

– Meanwhile, final data for 2014 – the latest year for which we have estimates

– show that annual investment in energy efficiency measures continues to grow. Natural gas and electric utility spending on efficiency reached $6.7bn, up 8.1% from the $6.2bn seen in 2013; Energy Savings Performance Contracting (ESPC) investment topped $6.4bn. Accordingly, electricity savings continue to climb year-on-year, breaching 25GWh in 2015. Since 2007, incremental efficiency achievements have risen 17% on average annually. On a sectoral basis, efficiency investment shrank slightly in the residential sector for the first time in over a decade, but expanded in commercial, industrial and other sectors. Regionally, New England, the Pacific, Great Lakes and the Mid-Atlantic region still lead in electrical efficiency savings. The Southeast remains a largely untapped market with fewer enabling policies such as energy efficiency resource standards (EERS).

• The US is making major strides toward a de-carbonized electricity grid and set important new records in 2015. Critically, these milestones represent structural changes to the fleet, suggesting a permanent change is afoot.

– Challenging economics and the shadow of environmental regulations encouraged the accelerated retirement 14GW of coal-fired power plants, representing 5% of the installed coal capacity in the country. Since 2005, the US has disconnected over 40GW of coalburning power plants, while adding only 19GW new coal to the grid. Several gigawatts of coal-fired capacity have also converted to natural gas or, in a few cases, biomass. Due to both these retirements and competition from low-priced natural gas, coal provided only 34% of US electricity generation in 2015, down from 39% in 2014 and from 50% at its peak in 2005.

– Renewables continue to pick up steam, with an estimated 8.5GW of wind and 7.3GW of solar photovoltaic (PV) installed in 2015. Wind build was 65% above 2014 levels, as developers rushed to complete construction ahead of the anticipated end-2016 expiration date of the Production Tax Credit. In total, 2015’s tally of 16.4GW fell just shy of 2012’s record 18.2GW of new renewable capacity; however, PV additions across both the distributed and utility-scale sectors set new records as 2.9GW and 4.4GW, respectively, connected to the grid. This represents a 13% bump up from 2014 build for PV. New hydro build hit 306MW (+115% from 2014) and geothermal added 61MW of new capacity (+33%). Biomass, biogas and waste-to-energy together added 224MW, up 15% from the year before.

– As natural gas prices sank to their lowest levels since 1999 and natural gas plants displaced generation previously provided by retiring coal plants, natural gas consumption in the power sector exceeded 10quads for the first time ever, surpassing 2012’s high-water mark of 9.8quads. Natural gas is now within striking distance of being the largest source of US power, producing just over 32% of US generation in 2015, compared to 34% for coal.

– Importantly, surging renewables build and coal retirements have not triggered a dramatic leap in retail power prices. Average retail electricity rates across the country remain 5.8% below the recent peak (2008) in real terms, in part due to cheap generation from natural gas. Year on year, retail rates in 2015 fell 1.3% in real terms, even as real GDP grew by 2.4%. There are, however, regional price differences. New York, Texas, the Southeast and states in the central southern US reaped the greatest price reductions over the past year (over 2%) and generally have the lowest retail prices in the country. California saw the largest uptick (1.8%) and, alongside New York and New England, has some of the highest retail prices in the contiguous US.

– The continued low cost of power allows the US to potentially out-compete a number of other countries on electricity charges for businesses, with average industrial retail rates in the US (7.1¢/kWh in 2014) far below those of Germany (15.9¢/kWh), China (14.3¢/kWh) and even India (10.7¢/kWh).

– Corporate procurement of clean energy continues to grow, doubling from 2013 to 2014 and again from 2014 to 2015. In 2015 alone, corporations contracted 3.1GW of new renewable capacity. Although wind farms make up the majority of this contracted capacity, solar jumped from 0.3GW in 2014 to 1.1GW the following year, quadrupling its share of the overall pie. Large corporate buyers included Google, Amazon, Facebook and Apple; the list of key players covered the retail, technology, manufacturing, financial and insurance sectors. Additionally, corporations such as IKEA, Comcast, Hyatt, Morgan Stanley, and Johnson & Johnson announced and/or commissioned fuel cell capacity in 2015.

• The evolution of US power is rapidly reducing the country's overall carbon footprint.

– The changes that have taken place over the past decade through 2015 resulted in the lowest yearly carbon emissions produced by the US power sector since 1995. At 1985Mt, the 2015 emissions figure was 4.3% below 2014 levels and 17.8% below 2005 levels. Two thousand five is both the benchmark against which the Clean Power Plan is measured, and against which the Obama administration set the goal of 26-28% emission reduction by 2025 contained in the US’ Intended Nationally Determined Contribution (INDC) for the UN climate talks in Paris.

• Critical policy supports have been unveiled that, if fully implemented, will ensure the US remains on track to a lower-carbon energy sector.

– The Obama administration sought to give policy certainty to the power industry and accelerate the de-carbonization of the US grid by finalizing regulations limiting carbon emissions from power plants in August 2015. The Clean Power Plan, which will regulate the country’s existing fleet of fossil-fired power plants, aims to cut emissions 32% (relative to 2005 levels) by 2030 through assigning each state a target emissions level (in tons of carbon) or emissions rate (in tons per megawatt hour). As the centerpiece of the Obama Administration’s INDC, the Plan was also supported by the New Source Performance Standards (NSPS) which set limits on emissions from newly constructed plants and will effectively require new coal-fired power plants to install carbon capture and storage technology.

– The Clean Power Plan’s reduction burdens (as measured by required cuts to emissions levels) vary widely across states. Those on the West Coast and in New England face smaller reduction targets that they are already on track to meet, while more coal-reliant states like Montana, the Dakotas and Kansas must cut emission levels by over 30%, even after accounting for recent and planned abatement actions such as coal retirements. To achieve these targets, states must design and carry out their own implementation programs, which will likely require a combination of coal-to-gas switching, renewables build and demand reduction measures such as energy efficiency. State proposals are due to the EPA by September 2018 and will be implemented from 2022 to 2030.

– In mid-December, 195 countries came together to sign the “Paris Agreement.” The Agreement is effectively a hodgepodge of bottom-up pledges from individual countries, including the US pledge to bring emissions to 26-28% below 2005 levels by 2025. Paris marks only one small milestone on the path to halting global climate change: as they stand today, the pledges would be insufficient for hitting the “below 2ºC” goal. But the agreement’s framework also includes five-year “check-ins” at which countries are encouraged to re-submit and strengthen their commitments.

– On December 18, Congress passed comprehensive spending and tax packages which revived critical federal supports for segments of the renewable energy and energy efficiency industries, while also lifting a 40-year-long ban on crude oil exports. The bill extended tax credits for wind and solar by five years apiece, through 2019 and 2021, respectively. Federal tax incentives for both technologies will be stepped down over the five-year periods. The Production Tax Credit for other renewable technologies (including biomass, geothermal, waste-to-energy and hydroelectricity) was only given an additional two years, through end-2016. The Investment Tax Credit for fuel cells was unchanged and will expire at the end of 2016. Energy efficiency incentives for residential, industrial and commercial investments were prolonged through December 31, 2016. Efforts are already underway to ensure these other clean energy technologies see their credits expanded further in 2016.

– Just after the close of the year, on January 25, 2016, the US Supreme Court issued a key ruling that would effectively allow ”demand response” (DR) programs to continue among large end-users. The Court upheld the Federal Energy Regulatory Committee’s authority to regulate DR within the wholesale energy markets. The decision brings several years of uncertainty to an end for DR players and should allow the market to flourish more broadly. Currently DR, which incentivizes industrial users to cut their consumption at times of excessively high demand, is most popular within the PJM Interconnection, a wholesale electricity market covering a number of mid-Atlantic and Northeastern states.

– In much of the country, state policy is as important as federal in advancing clean energy and the underlying infrastructure necessary to support it. For example, state and local “net energy metering” (NEM) policies and utility rate designs are essential to the economics of distributed generation. Two thousand fifteen saw two significant and differing regulatory proposals for addressing NEM. California unveiled a second-generation “NEM 2.0” program which maintains a net metering regime, with requirements that solar customers move to time-of-use rates, pay an upfront interconnection fee and pay the same nonbypassable charges as customers without a solar system. Neighboring Nevada adopted NEM program changes that alter the rates charged and credits granted to customers with rooftop solar, changing the economics for both existing and future solar customers. Similar proceedings regarding NEM and rate design policies are underway elsewhere, as states consider the implications of further growth in distributed generation and how to balance the need to advance deployment, while addressing concerns over potential rate inequities between solar-owning and non-solar-owning ratepayers, which could affect future investments in the underlying grid infrastructure.

– Another form of critical state policy is the renewable portfolio standard (RPS) – a state mandate on the share of utility-delivered power provided by clean energy. RPS are the main driver behind wind and solar build in the Northeast; they incentivize renewables generation in other states as well. In 2015, Hawaii increased its target to 100% renewables by 2045, while California and New York raised their targets to 50% by 2030. Meanwhile, West Virginia became the first state to repeal its RPS and Kansas turned its mandatory standard into a voluntary program.

– Energy efficiency resource standards (EERS) have advanced in the past decade, but momentum slowed after 2010. Florida and Indiana removed their programs in 2014, Ohio froze its scheme in 2015 and federal support of energy efficiency did not receive the fiveyear extension that was granted to wind and solar investments. However, a handful of states including Delaware, Utah and New Hampshire are on their way toward adopting EERS. Additionally, the final Clean Power Plan has an option for states to count energy efficiency measures toward compliance.

– Nevertheless, state and local governments continue to enact other critical policies to promote energy savings, with 10 states adopting more stringent residential and commercial building codes in 2015, including Texas, California and New Jersey. Three cities, including Atlanta, enhanced building energy use policies, setting mandates for commercial buildings to report and benchmark their consumption. As of the end of 2015, 6.5bn square feet of commercial floor space, or around 7.7% of total US commercial sector floor space, was covered by such policies.

• A ‘new normal’ of lower oil prices is being felt through the US economy and offers both opportunities and potential obstacles to the greening of US energy.

– Lower gasoline prices dented sales of alternatively-fueled vehicles in 2015. Hybrid and plug-in hybrid vehicles, which compete more directly with traditional gasoline-fueled cars, took the biggest hit: sales of these two vehicle classes were down 16% and 24%, respectively, relative to 2014. But other equally important factors were also at play, including supply constraints and delays in new model rollouts that dampened sales in the first half of 2015.

– However, sales of battery electric vehicles (BEV) proved resilient, growing 16% over the course of 2015, relative to 2014 levels. State and federal purchasing credits help to keep the lifetime costs of BEV ownership up to 25% below that of comparable midsize gasolinefueled cars. Additionally, a significant amount of BEV purchases – notably, those of the Tesla Model S – continue to be motivated by non-economic factors.

– Overall, gasoline consumption rose 4.1% in 2015, the largest annual increase since 1988, as prices at the pump fell an additional 11% after collapsing by one third in 2014. For the first time since record-keeping began in 2008, the average fuel economy of vehicles sold for model year 2015 stayed flat relative to the previous year, at 25.3mpg. In previous years, the impact of Americans’ preference for SUVs and pick-up trucks had been tempered by both higher oil prices and improving vehicle efficiency, in line with federal Corporate Average Fuel Economy (CAFE) standards Over the past year and a half, however, the collapse of retail gasoline prices by more than 40% was enough to stall the annual gains in vehicle efficiency. But 2015 may prove to be an anomaly: the average fuel economy of vehicles sold remains 20% above that of 2008 levels, and continued hikes in CAFE requirements should ensure a return to this trend over the long term.

– Natural gas production and storage inventories reached all-time highs in 2015. Sustained low energy prices have prompted oil and gas producers to decrease drilling activity; hence, fewer rigs are in operation, leading to more competition amongst rig operators. Service companies have slashed fees in response, allowing drilling and completion costs to fall for oil and natural gas wells alike. In addition, improved technology and experience have enabled producers to continue to produce natural gas at even lower costs, with many of them focusing on regions with the most favorable production economics. Together, these factors have buoyed supplies in a depressed price environment. In December 2015, natural gas prices fell to the lowest levels seen since 1999.

– Thus, although lower-priced crude has little direct effect on the power sector (oil is burned for less than 2% of US generation), it has indirectly impacted the electricity markets by helping to weigh down natural gas prices. Natural gas-burning power plants substantially influence power prices across the US. As gas prices have fallen, so have wholesale power prices. For power generators bidding into the wholesale electricity markets, the decrease in power prices has squeezed profit margins. The lower-priced gas environment changes the equation for all power generators operating in deregulated markets, by potentially lowering future revenue streams.

– For technologies such as solar thermal and solar PV, falling power prices can make “grid parity” that much more difficult to achieve. However, generation costs associated with renewables have also been dropping. In windy parts of the country like Texas and the Midwest, wind developers have signed long-term power purchase agreements (PPAs) in the range of $19-35/MWh, undercutting both on-peak and off-peak power prices as well as other sources of generation. Also in Texas, utility-scale solar plants have achieved PPAs at rates close to $50/MWh, and in regions with either high retail electricity rates or high solar PV capacity factors, distributed solar can be an economically competitive option for homeowners. These falling costs, combined with the anticipated drawdown on the federal Investment Tax Credit and the expiration of the Production Tax Credit, led to significant build in solar and wind in 2015. New build in solar (7.3GW) and wind (8.5GW) outpaced even that of natural gas (6.0GW). Wind in particular marked a 65% increase in build from the previous year. Geothermal, hydro, biomass, biogas and waste-to-energy saw 0.6GW of build. New capacity additions in 2015 for geothermal jumped one-third from the previous year, while biomass, biogas and waste-to-energy saw a 15% bump. The rate of hydro installations soared 115% during the same period.

• The US continues to extract unprecedented volumes of natural gas thanks to greater productivity from existing resources. This extraordinary resource is being put to use in a growing variety of ways.

– Low gas prices are further supported by Appalachian Basin shale production, which continues to expand despite a shrinking rig count as producers drill more selectively and technologies improve. Output from the Marcellus and Utica shales has been so abundant that domestic natural gas production through the first nine months of 2015 increased 6.8% from 2014 and 26% from 2007 levels, even as traditional "dry" gas production has declined.

– With the natural gas center of supply rapidly shifting from the Gulf Coast to the Northeast, midstream companies are playing catch-up to reverse existing pipelines and to re-plumb the network to transport gas out of the inundated Appalachian Basin. In 2015, companies installed over 11Bcfd of total pipeline capacity across the country, including 3.3Bcfd of takeaway capacity from the Marcellus and Utica shales. Many more projects were approved or filed for approval this year, but due to routine delays, the bulk of these projects are not expected to be in service until 2017 or 2018.

– Gas utility construction expenditures for distribution infrastructure rose to $9.7 billion in 2014, compared to an average of about $5 billion per year during the 2000s, according to data compiled by the American Gas Association. This reflects, in part, the increased prevalence of natural gas replacement and expansion programs across the US.

– Since 2007, the US has poured $445bn into renewable energy and energy smart technologies, which enable the integration of variable sources of power generation into the grid. Annual totals range from $36bn to $64bn; investment in 2015 hit $56bn, up 8% from the year before. Just over half of all new investment was directed towards solar, and 21% towards wind. The increase came as project developers rushed to get projects online ahead of the anticipated expiration of critical federal tax credits, and as falling costs made rooftop solar economically competitive in parts of the country.

– Asset financing, which includes only investment in new projects, for biomass facilities rebounded to $349m in 2015 from none the previous year; biogas received $285m in 2015, about seven times what it saw in 2014. The rush was again due to tax credit considerations. At the same time, flows into other renewables continue to taper, with virtually no new financing directed towards new construction in geothermal, small hydro or carbon capture and storage in 2015. Waste-to-energy has not seen asset financing since 2012. Outside of the power sector, energy smart technologies attracted $3.1bn, with Tesla Motors leading the pack.

– Investment in key infrastructure to support the transformation of the grid remains critical and continues to lag the rapid build-out of renewable technologies in some regions of the country. Transmission constraints in high wind-build areas such as the Midwest, for example, have led to the curtailment of generation from zero-carbon sources. In 2014, investor-owned utilities invested $98bn in upgrading the electric grid; early estimates put forward by the Edison Electric Institute suggest $20bn was directed towards transmission. In Texas, a multi-year $7bn investment in the Competitive Renewable Energy Zone (CREZ) has allowed the state to connect up to 18GW of wind capacity in the West and the Panhandle to load centers in the Southeast, helping to relieve transmission congestion costs and reduce curtailment. Several large projects, currently in the planning stage, hope to follow Texas’ lead by building new lines connecting wind in Kansas and Iowa to demand in the Midwest and Mid-Atlantic.

– Globally, the US held its place as the second-most attractive country for clean energy investment – but it remains far behind China, which received $111bn worth of capital flows into the sector compared to the US’ $56bn. Other APAC countries brought in $58bn, while investment in Europe fell off dramatically to $59bn from $72bn in 2014. • Renewable energy technologies are a substantial and growing portion of the overall US power matrix. – Renewables including large hydro now make up 20% of the US plant stack, at 222GW. Hydroelectric facilities and pumped storage represent nearly half of this at 102GW – a figure that has stayed roughly constant since 2008. Wind is the second-most prevalent renewable technology, standing at almost 75GW at the end of 2015, roughly triple its installed capacity at the end of 2008 (25GW). But solar has been the fastest growing, averaging a 60% clip annually since 2008 to bring its total capacity to 28GW.

– Geothermal, biomass, biogas, and waste-to-energy additions have grown at a slower pace, with 3.2GW added collectively since 2008. Capacity for biomass, biogas and wasteto-energy reached a total of 13.5GW in 2015, 15% above 2008. Geothermal installations have also risen 15% since 2008, to finish 2015 at 3.6GW. These technologies provide around-the-clock power at levelized costs comparable to those of other renewables, but they have not enjoyed the same policy support as the wind and solar industries. They continue to represent roughly 17GW of capacity across the country. Hydropower, for its part, is also supported differently compared to wind and solar, which has meant that installed capacity has stagnated at just under 102GW since 2008.

– Distributed generation, driven by solar PV, is playing a rapidly growing role in the renewable energy story. 2015 was yet another record year for distributed solar PV in the US, with 2.9GW of new build due to growth in both the commercial and residential sectors. As a result, cumulative distributed PV capacity in the US now exceeds 11GW. Build for combined heat and power (CHP) installations ticked up 25% over 2013 levels, clocking in at 847MW in 2014, due to greater demand from the industrial sector. Cheaper gas has also incentivized CHP generation, which soared from 304TWh in 2013 to over 360TWh in 2014 and 2015. However, not all news is good for distributed generation outside of solar. Growth in CHP is still hampered by the lack of supportive federal or state policies. Activity in other distributed, smaller scale technologies has also been muted, with only 6MW of small- and medium-scale wind built in 2014 and three small-scale biogas projects in 2015.

– Behind-the-meter storage has grown in popularity among commercial and industrial players in states such as California, Hawaii and New York, where utilities set high demand charges. Some of the storage projects are supported by subsidies such as the SelfGeneration Incentive Program (SGIP) in California, which offers $1.46/W for a storage system and has induced the installation of 119 projects, or 2.4MW of commercial storage in the state. The economics for residential distributed storage have been less favorable as net metering and lack of time-of-use tariffs limit its economic case. However, utilities such as Southern California Edison, Con Edison, and the Hawaiian Electric Company have begun to explore aggregated distributed storage (sometimes with solar). Companies including Sunverge, Stem, Green Charge Networks and Advanced Microgrid Systems have started piloting advanced storage management systems to coordinate and aggregate distributed storage (sometimes also coupled with solar or other generation sources). In 2015, aggregated storage bid successfully into California's real-time power market; the technology can also provide grid services.

2015 was a transformative year in the US energy industry. Greater energy efficiency and structural changes to the composition of the economy allowed the US to achieve higher energy productivity. The power sector continued to de-carbonize and add near-record amounts of clean energy as policy activity at the global, national and state levels set the country on track for further emissions abatement. Unprecedented levels of natural gas supply pushed down power prices, putting the country in a more internationally competitive position while also prompting coal-to-gas switching that slashed US carbon emissions. Utilities are investing more in energy efficiency measures to curb both electricity and gas demand. At the same time, the grid itself is being reshaped by greater penetration of renewables and growth in distributed resources such as solar PV and storage. The policy frameworks laid out in 2015, combined with the beginnings of structural change in the power sector and beyond, are pushing the country toward greater energy productivity and cleaner growth in the decades to come.

“Leonardo DiCaprio used his Oscar acceptance speech last night to declare that climate change ‘is real’ and to blast what he called the ‘politics of greed’…DiCaprio won the Academy Award for best actor for his role in ‘The Revenant’ as a 19th-century frontiersman…‘Climate change is real; it is happening right now. It is the most urgent threat facing our entire species, and we need to work collectively together and stop procrastinating,’ DiCaprio said…Speaking to reporters after the Academy Awards ceremony, DiCaprio said he had hoped he’d be able to bring his message about climate urgency to the millions of people watching the Oscars. He…[again expressed gratitude and] addressed the upcoming 2016 presidential elections…‘The truth is this: If you do not believe in climate change, you do not believe in modern science or empirical truths’…[He is now] working on a documentary about climate change…”click here for more

“The solar industry is now on an unstoppable growth path that could make it the most important energy source of the next century. Costs are falling, installations are growing, and technology advancements seem to be picking up speed…This week alone, there were three major solar energy records announced…[T]he U.S. solar industry installed 7.3 GW of new capacity in 2015, up 14% from a year earlier. This is nearly 20-fold from just 385 MW installed in 2009 and was the first year solar has topped new natural gas capacity additions…[First Solar] said it achieved [its ninth efficiency record since 2011] of 22.1% for a CdTe solar cell…[and] SunPower announced that its X22 panels reached an efficiency record of 22.8%...This efficiency advantage allows SunPower to generate more electricity from every rooftop or acre of solar farms, which has become a major advantage as costs have fallen…Look for the companies leading this technology advancement to be big winners as investments…”click here for more

“…The Indian Point nuclear power plant in New York State is leaking radioactive contaminant into nearby groundwater, and despite plant operator Entergy’s assurances that the leak has ‘no health or safety consequences,’ Governor Andrew Cuomo called earlier this month for a full investigation…The latest revelations add to a mounting list of recent accidents and problems at Indian Point…As of November of last year, Cuomo’s office actively opposed the continuing operation of Indian Point…[L]eaks have been found at as many as 75% of U.S. nuclear plants…[There is] a sharp global move away from nuclear power following 2011’s meltdown at Japan’s Fukushima Daichi reactor…[Led by Japan, countries including France and Germany have moved to] phase-outs, with Germany in 2011 pledging to phase out all nuclear power by 2022. Austria and Spain have stopped all construction on new nuclear plants. The U.S. had not constructed a new nuclear power plant in nearly twenty years when, in October of 2015, a plant in Tennessee was given the go-ahead…Nuclear plants represent huge threats to nearby areas, though the risk of a disaster at any one plant is small. While Stanford researchers have found that Fukushima’s fallout may directly cause only about 300 deaths worldwide, estimates of economic losses range from $250-$500 billion, stemming largely from the removal of 159,128 people from a zone the size of Connecticut—land which will be uninhabitable for centuries.”click here for more

Friday, February 26, 2016

CLIMATE AND A FINER POINT OF LAW

“…[Columbia University] legal scholars may have found a promising, never-before-used route for enacting emission reductions…[Section 115 of the Clean Air Act can be used[to compel the United States to cut emissions—without going through Congress…When the article was released, Obama’s plan to reduce greenhouse emissions by 25 percent, the Clean Power Plan, was still going forward…[Then] the Supreme Court issued an unprecedented stay…The drama surrounding the Clean Power Plan’s judicial struggles increased, as only days later, conservative Justice Antonin Scalia died…Without Scalia on the court, the vote will likely be tied 4-4, making Scalia’s replacement the deciding vote…[Under Section 115 of the Clean Air Act,] the Environmental Protection Agency can force states responsible for polluting other countries to cut emissions so long as those other countries agree to cut their own emissions. Agreements made at the 2015 United Nations Climate Change Conference between 195 countries to reduce carbon dioxide production could make this reciprocity clause easy to fulfill...In addition to the ability to bypass Congress, a regulation on the basis of Section 115 would also be supported by strong, broad language that could render judicial attacks null…”click here for more

CHINA’S GOLDWIND NOW WORLD LEADING WIND MAKER

“General Electric Co. has ceded its position as the world’s No. 1 wind turbine manufacturer to a Chinese competitor, according to 2015 market data compiled by Bloomberg New Energy Finance…Xinjiang Goldwind Science & Technology Co. Ltd. received orders for 7.8 gigawatts of new wind turbines in 2015, exceeding GE, which dropped to No. 3 globally with 5.9 GW of new commissioned capacity…Vestas Wind Systems A/S of Denmark attracted 7.3 GW of new orders in 2015, solidifying its No. 2 ranking...[Almost all of Goldwind’s] recent growth was in the Chinese market, where wind power developers are riding an unprecedented boom. About 29 GW of new capacity came online in China last year alone…GE Renewable Energy, a division of the 124-year-old conglomerate…also saw rising demand for its advanced wind turbine technologies, especially in the United States…But GE’s turbine orders increased by 700 megawatts over 2014 levels, a modest gain compared to its two largest rivals…Congress’ most recent extension of the 2.3-cent-per-kilowatt-hour PTC should help firms like GE and Vestas further grow their U.S. markets. But catching up with a soaring China may prove difficult…”click here for more

SILKY SOLAR IN INDIA

“Indian scientists have discovered a UV-sensitive substance on silk cocoon membranes which converts light into electricity, a finding they say has opened up possibility of designing a bio-solar battery for medicine and also has potential applications in development of third generation solar cells…[The role of photo-electric properties of silk cocoon membrane in pupal metamorphosis: A natural solar cell[reports] a pupa in a silk cocoon senses light…[when] a simple flavonoid molecule on the surface of the cocoon that acts as a UV absorber…[T]he finding has implications for development of third-generation dye-sensitive solar cells…[because the cocoon converts light, especially UV light,] to electricity…[B]y tapping into the properties of silk cocoons, a bio solar battery could be designed…[that could] be essentially low cost due to abundance of silk…”click here for more

JAPAN WANTS OCEAN ENERGY

“…[The coastal city of Nagasaki, the capital of the Nagasaki Prefecture, wants to be] Asia's premier hub for marine energy engineering…[It may be] the location for a new tidal and floating wind energy test site in Japan, thanks to its large natural harbour and existing expertise in ship building…[That] could establish Nagasaki as a ‘gateway’ for the Asian market for European marine energy developers, and help diversify the local economy away from shipbuilding, an industry which is struggling to compete against the stiff competition from nearby China and South Korea…[Japan’s] plan is to build a new test centre, similar to the European Marine Energy Centre (EMEC) in Orkney, which would help bring marine energy to scale in Asian waters and provide real-world data for the Japanese government on which to base subsidy support for ocean energy technologies…[A]n Asian outpost for the nascent marine energy industry may be just the thing for European developers wrestling with domestic governments wary of spiralling costs. It may be that Nagasaki will soon becomes famous as a pioneer of clean energy…”click here for more

Thursday, February 25, 2016

CLIMATE KNOWLEDGE NEEDS CLIMATE ACTION

“…[T]hose who acknowledge climate change aren't that much greener than the sceptics…They talked the talk, but didn't walk the walk…[according toMeta-analyses of the determinants and outcomes of belief in climate change and while] people who acknowledge climate change are more likely to agree something needs to be done about it, their behaviour doesn't reflect the same trend as strongly…The study also found traditional demographics -- gender, age, sex, race and income -- didn't have much sway on people's climate beliefs. Instead, the strongest link was with political affiliation…Those with more conservative viewpoints [are twice as likely] to be more sceptical about the reality of climate change than those with liberal affiliations…”click here for more

WIND BREAKS OUTPUT RECORDS, GETS TO 40% ON THE GRID

“Records for wind energy productivity were set across the country in late February. On Feb. 18, the Electric Reliability Council of Texas (ERCOT) obtained a record 14,023 MW of wind-generated electricity and a record 45.14% of wind penetration on its grid…On Feb. 19, the Midcontinent Independent System Operator (MISO), which serves all or part of 15 states from Minnesota to Louisiana, obtained a record 13,084 MW from wind. The same day, the Southwest Power Pool(SPP), which serves the lower Midwest, got a record 43.9% wind penetration…These records are expected to be surpassed as stronger spring winds pick up because the U.S. wind energy reached record levels of new capacity installation in 2015, according to the American Wind Energy Association (AWEA) 2015 Market Report...Wind energy now provides about 4.9% U.S. electricity and policies are in place that should make it possible for the industry to meet the U.S. Department of Energy forecast that it will supply 20% of the country’s electricity by 2030…”click here for more

SITING SOLAR TO FIT HISTORY

“A historic estate along the Georgia coast that traces its roots back more than three centuries may soon provide a look at solar energy's potential…[University of Georgia College of Engineering students are working at the Wormsloe Plantation to] be mindful of permitting issues that would not exist in other places…[and consider] cultural and ecological impacts…The university operates the property as a historical and ecological preserve…[and as a site for interdisciplinary research] in archaeology, ecology, environmental planning and design, historic preservation, landscape architecture, geography, history and engineering…[The students are designing] a demonstration solar power installation that will allow visitors to see a working renewable energy system…connect to Wormsloe's existing infrastructure…[and allow] for future expansion…”click here for more

FORESEEING THE SMART ELECTRIC CAR FUTURE

“Self-driving cars are quickly becoming a reality, but getting a car to steer itself is just the tip of the iceberg, according to Qualcomm President Derek Aberle...Since Qualcomm’s founding, it has] shipped over 340 million chipsets to vehicle manufacturers, creating the technology that will change cars from analog machines to sophisticated digital devices…[Interconnected cars] could sense pedestrians and obstacles around them, directly communicating with the infrastructure of their environment to navigate safely…[Self-parking cars could] get data on open parking spaces after their driver got out…[An interconnected network of vehicles could] communicate with one another during traffic congestion to find the quickest way through…Giving up control of the wheel may not appeal to some drivers, but Formula One racing champion Lewis Hamilton wouldn’t mind one bit…[He] hates driving when he isn’t on the track. So when autonomous cars hit the streets, he’ll have no problem letting Siri take the wheel…”click here for more

The battle lines are already drawn even though the final version of the Obama administration’s Clean Power Plan is still likely a month and a half away at least.

Two new studies show that some of the states objecting strongest to the federal carbon regulations are already well on the way to meeting them. But at the same time, almost all have concerns about the reguations as they are proposed.

“Our analysis demonstrates that decisions made before the Clean Power Plan ever existed, on retirements of uneconomic coal plants and on renewables and energy efficiency standards, put 31 states at least halfway there and 14 fully on track for 2020,” said Union of Concerned Scientists (UCS) Senior Energy Analyst Jeremy Richardson. “That demonstrates better than anything these targets are achievable.”

By “on track for 2020,” Richardson meant that 45 of the 50 states are at, or at least halfway to, the 2020 benchmark emissions reduction rate starting points set by the EPA in the CPP draft version released last year for public comment.

Wallach found strong indications of increased controversy over the regulations at the state level in his detailed analysis for Brookings of comments submitted to the EPA by state environmental agencies that are in charge of implementing the regulations on the state level.

When the final version is announced later this summer, the Clean Power Plan(CPP) will be a national program administered by the Environmental Protection Agency (EPA) to reduce overall U.S. greenhouse gas emissions 30% below 2005 levels by 2030.

Most states are ready, or are gettting close

“In their comments, a lot of the states say they can’t meet their 2020 target, but they don’t really have a 2020 target,” Richardson, a lead researcher in the UCS analysis, explained. “In the period between 2020 and 2029, each state has to meet an average emissions rate target. That is the interim target. The beginning of that glide path from 2020 to 2029 is a benchmark. It is a way of assessing how far along a state is as it begins the averaging process.”

The UCS analysis shows that for at least 90% of states, ramping up cost-effective renewables and efficiency measures will get them all the way to compliance “at modest costs or net savings to consumers,” he added, “and that includes three of the states suing the EPA to stop the CPP.”

The top 14 states, which represent 34% of the U.S. population and 38% of U.S. GDP, are on track to better their 2020 benchmarks.

Predictably, ten – California and New England’s nine Regional Greenhouse Gas Initiative (RGGI) members – are states with their own emissions reductions programs. Hawaii, because of its push for renewables and efficiency to escape high electricity prices resulting from oil dependence, is the eleventh.

Surprisingly, two of the most coal-dependent states in the U.S. are also among the top 14 and “disproving their own case,” Richardson noted.

Due to existing air regulations like the EPA's MATS rule and the low price of natural gas, Kentucky is on track to meet its 2020 benchmark just from closures and planned closures of uneconomic coal plants announced since the start of 2013, Richardson said. Ohio gets 60% of the way from coal plant closures and the rest of the way from renewables and efficiency.

“But Ohio froze its renewables mandate and repealed its efficiency standard,” Richardson said. “That is shortsighted. It is on track for the 2020 benchmark but it still has to meet the 2030 target.”

At 55%, Indiana is one of 31 states at least halfway to its benchmark, thanks to coal plant retirements and its energy efficiency program.

“They would have been the fifteenth state on the first list if they hadn’t cancelled the Energy Efficiency Resource Standard,” Richardson said. “That, again, is very shortsighted policy. We know where the laws are going. The transition is underway.”

Despite the bright prospects suggested by the UCS analysis, political and legal opposition to the CPP is clearly on the horizon, and has already materialized in many states.

At the highest level, the overt tone the comments filed during the EPA’s comment period is partisan, Brookings' Wallach explained. State environmental agencies under Republican governors made nearly every possible objection to it while environmental agencies under Democratic governors defended the EPA and the plan's legality.

But at the same time, he noted, environmental agencies working for governors of both parties share concerns about whether the plan is fair to their state, whether power delivery reliability might be compromised, and whether the proposed timeline is reasonable.

Concerns about fairness suggested the CPP effectively penalizes states for cutting emissions before 2012, the baseline year from which carbon reductions are measured under the plan, because further cuts may be more costly.

Half of Republican states’ environmental agencies filed comments withfairness concerns but almost half of Democratic states agencies did, too, the Brookings analysis reports. Democrats tended to argue their states should be credited for early voluntary actions. Republicans argued their states should not be punished for prompt compliance with other EPA regulations already forcing coal plants offline.

Concerns about grid reliability centered on the unproven reliability of renewables and efficiency measures, Brookings finds. Several states predicted small disruptions that could lead to catastrophic rolling blackouts. Buoyed bystudies of the regulations with divergent conclusions, that debate is highly partisan, with environmental agencies from eighteen states with GOP governers and six with Democratic ones raising the reliability concern.

The biggest point of agreement for state environmental agencies, Brookings reports, was on the 2020 starting point. Much of the controversy could be eased if EPA offers a “safety valve” provision that allows temporarily higher emissions rates to states that encounter credible initial compliance obstacles. Three-fourths of state agency comments called for a timeline adjustment.

The most partisan argument, filed by three-fourths of states with Republican governors and two coal-dependent states with Democratic governors (Kentucky and West Virginia), was that the CPP is completely unworkable and should be thrown out either because of its:

Emission rate calculation methodology,

Costs of compliance, including costs for new infrastructure and for stranded assets,

Social impacts of rising electricity prices on low- and fixed-income individuals, or

Impacts on competitiveness from rising electricity prices

Most often, Wallach said, comments expressed mixed sentiments. Some state agencies with Republican governors had strong objections to the CPP but did not call for throwing it out. Most state agencies under Democratic governorssupported it but expressed reservations.

Observers should expect no political changes, even after the 2016 election, that eliminate the most deidicated opposition to the CPP, Brookings concludes, but concerns about the plan, though they may differ by political orientation, "transcend party lines."

“Fairness concerns will persist no matter what kinds of changes EPA makes to its final rule,” the report concludes.

The 4.3 million comments filed about the CPP offer “a sense of the diversity of concerns that EPA must reckon with,” it adds. “There is every reason to expect that serious difficulties await the final rule.”

The CPP could very well become a major source of federal-state conflict and even a new partisan conflict, though probably not soon, Wallach said. The most potent and aggressively pursued lawsuits are still to be filed and likely will come within 60 days of the August finalization, he explained.

West Virginia vs EPA, the lawsuit referenced in the UCS study, probably won’t “amount to much,” he said. “Two of the three judges stressed how uncomfortable they were in considering any kind of challenge to a rule that has merely been proposed rather than finalized.” But that case, he added, is “a sign.”

The CPP’s legal authority comes from the Clean Air Act (CAA), which was crafted during the Nixon administration on “a structure of cooperative federalism” in which EPA sets the emissions standard and each state then writes and enforces its regulations. If the EPA concludes the state’s efforts are inadequate, it could attempt to impose its own plan. But the CPP's “federal legal authority may prove to be rather limited compared to states’ possible responses,” according to Wallach.

Still, many expect the EPA will try to impose and administer a Federal Implementation Plan (FIP) in states that don’t implement their own. If it is shown to be legal, that could represent leverage since an FIP is likely to be even worse for a state’s economy and its conventional generation, Wallach believes.

“It is EPA’s strong preference that states submit their own plans so they can take full advantage of the choices the rule provides,” EPA spokesperson Liz Purchia told Utility Dive.

Many state energy stakeholders, even those who want to see the Clean Power Plan fully implemented, warn that a federal plan could make the regulations more difficult for their state's utilities.

An FIP is not likely to account for a state’s specific needs and opportunities the way a state-created plan would, Kate Zerrenner, Texas Clean Energy Program Manager at the Environmental Defense Fund, said in discussing recent Texas legislation threatening to block the state’s preparations.

“Texas agencies have staff dedicated to Texas. EPA has a few people dedicated to the region. If they have to come up with a plan, they will probably do what is easiest," she explained. “We can comply with more of our own wind and our almost untapped solar and energy efficiency resources. But EPA would most likely just replace coal with natural gas.”

But an FIP may not be within the EPA’s legal reach, some say.

“It is not clear there is anything in the CAA that allows EPA to do an FIP that controls pollution and if they try to do so they could meet legal challenges that would succeed,” Wallach said. "That could escalate both the political and the legal conflicts to new heights.”

But on that point, many stakeholders and energy scholars disagree. At a recent panel discussion on the implementation of the Clean Power Plan at the Edison Electric Institute's annual convention, Alexandra Dunn, executive director of the Environmental Council of the States, noted that the EPA has designed federal implementation plans before for regulations under the Clean Air Act, and those actions were upheld as legal.

"This is going to move forward," Dunn, who is also ECOS's general counsel, said. By the time the challenges to the Clean Power Plan reach the Supreme Court, as many expect, states will already have to be well on their way to meeting the 2020 interim goals under the plan, she said.

That means that even in the resistant states, air regulators are likely to devise compliance plans to make sure they're prepared if the court challenges fail. "It's not a pretty picture" to not submit a compliance plan, Dunn said, and its likely the plan will be largely upheld through all the court challenges.

"Here's what someone at EPA told me: 'This is one where every legal argument against this rule has been laid out from day one. There are no hidden, gotcha arguments,'" Dunn said. The agency, she added, has 49 lawyers working full time on the finalized version of the regulations leading up to their expected August release date.

Her opinion on the rule's legal chances was echoed by the heads of five major utilities at the conference. Speaking at a later panel discussion, the CEOs of Edison International, American Electric Power, Southern Co., Exelon, and Dominion all agreed that while the Clean Power Plan likely constitutes an overreach of the EPA's authority, it will be largely upheld by the courts.

Most stakeholders assumed the Supreme Court’s 2007 decision in Massachusetts v. EPA, which gave the EPA the right to regulate greenhouse gas emissions under the CAA, would push Congress to act on climate change, Wallach explained.

But Congress has shown it can’t get anything done and the CPP appears to bethe best alternative, he went on. The question is whether it can be made to work and stand up to legal and political challenges.

There will be a variety of state political strategies, Wallach believes. One will be the “just say no” response that Senate Majority Leader Mitch McConnell (R-KY) has been calling for “to see what happens if nobody complies.”

An alternative to an FIP is EPA’s CAA-authorized option to sanction a state’s highway funding if it is not complying, Wallach said. But that would escalate the conflict and potentially involve voters, making it "a big political risk for EPA.”

If there is a series of legal battles, and especially if the EPA loses some, the legal and political could become interactive.

As court challenges continue, he explained, the utility industry and sympathetic regulators and politicians would begin asserting that the legal and political uncertainty are impairing long term planning. Calls could start for Congress to take action. A dramatic spike in energy prices attributed to the CPP or evidence that compliance created a power supply disruption could turn into a grassroots protest.

“Then a Republican Congress could act to undo the whole thing,” Wallach said.

The legal and political battles will take up "enormous amounts of manpower in the coming years,” Wallach believes. But it is “delusional” to think conflict can be avoided because there are real legal questions, because coal interests their allies won’t roll over, and because the partisan divide on climate change will persist.

“That is unfortunate because, by any objective reckoning, the CPP is a poor fit for this problem and a carbon tax makes more sense,” Wallach said, though “digging deeper trenches remains the far more popular course for now.”

“…[New Energy] accounted for almost two-thirds (63.85%) of the 16,485 megawatts (MW) of new electrical generation placed in service in the United States during calendar year 2015…[according to the monthlyEnergy Infrastructure Updatefrom the Federal Energy Regulatory Commission (FERC). Wind] accounted for 7,977 MW of new generating capacity - or nearly half (48.39%) of all new capacity for the year. That is a third more than the 5,942 MW of new capacity [from new natural gas. Solar] placed second with 2,042 MW…FERC reported no new capacity at all for the year from nuclear power and just 15 MW from ten units of oil and only 3 MW from a single new unit of coal. Thus, new capacity from renewable energy sources during 2015 (10,525 MW) is more than 700 times greater than that from oil and over 3,500 times greater than that from coal…The share of total installed capacity from non-hydro renewables [is 9.27%]…”click here for more

“…[Australia’s Redback Technologies] claims to have harnessed the power of algorithmic software and efficient design to produce [a highly] cost-effective solar storage system…Despite relying on a smaller battery than [Tesla’s] Powerwall – which is widely expected to be the catalyst for rapid growth of the solar storage market this year – Redback says…it would take an average 5.6 years to earn back [its ‘Ouija board’ system’s] $9,000 price tag through electricity bill savings, versus 11 years on the Powerwall’s $15,000 to $17,000 installation cost…[Redback is] less concerned with batteries as the cutting edge of the household solar energy market as…[with tackling the problem of how households can consume more than 25-30% of the power from] their solar panels…The Powerwall, with its Lithium battery, would take ‘self-consumption’ to 57%...The Ouija system would better that at 61% and ‘about a third less in cost’ than the Powerwall…”click here for more

“…[Studies continue to connect extreme weather [to climate change caused by human-produced greenhouse gases…[Republican candidate John Kasich said ‘I’ve talked about climate change. I think there is such a thing… we need to develop all of the renewables and we need to do it in an orderly way, and we need to have wind and we need to have solar’…[Donald Trump said ‘I am not a believer and unless somebody can prove something to me… I believe there’s weather, I believe there’s change and I believe it goes up and it goes down’…[Marco Rubio said] ‘We are not going to destroy our economy, we are not going to make America a harder place to create jobs in order to pursue policies that will do absolutely nothing, nothing, to change our climate, to change our weather’…[Bernie Sanders said] ‘We need to be bold and decisive. We can create millions of jobs. We must, for the sake of our kids and grandchildren, transform our energy system away from fossil fuels to energy efficiency and sustainable energy’…[Hillary Clinton said ‘"I won’t let anyone take us backward, deny our economy the benefits of harnessing a clean energy future, or force our children to endure the catastrophe that would result from unchecked climate change.’]”click here for more

TODAY’S STUDY: THE U.S. NEW ENERGY POTENTIAL

Economic potential, one measure of renewable generation potential, is a metric that attempts to quantify the amount of economically viable renewable generation that is available at a location or within an area. Economic potential may be defined in several ways. For example, one definition might be expected revenues (based on local market prices) minus generation costs, considered over the expected lifetime of the generation asset. Another definition might be generation costs relative to a benchmark (e.g., a natural gas combined cycle plant) using assumptions of fuel prices, capital cost, and plant efficiency. Economic potential in this report is defined as the subset of the available resource technical potential where the cost required to generate the electricity (which determines the minimum revenue requirements for development of the resource) is below the revenue available in terms of displaced energy and displaced capacity…

This metric can be a useful screening factor for understanding the economic viability of renewable generation technologies at a detailed geospatial resolution as well as for assessing the impact of technology improvements, policies, and other actions that can affect market access. It differs from many common estimates of renewable energy potential in that it does not directly consider market dynamics, customer demand, or most policy drivers that may incentivize renewable energy generation. As such, economic potential cannot be used to predict what technologies will be deployed or when, and should not be expected to match estimates found in deployment scenarios.

Economic potential for a location can be understood in relation to other types of renewable energy potential (Figure ES-1). The largest potential, resource potential, is the amount of energy physically available. Technical potential takes into account real-world geographic constraints and system performance, but not economics. Economic potential is the subset of the technical potential that is available where the cost required to generate the energy (which determines the minimum revenue requirements for development of the resource) is below the revenues available. Lastly, market potential is the amount of energy we expect to be generated through market deployment of renewable technologies after considering the impact of current or future market factors, such as incentives and other policies, regulations, investor response, and the economic competition with other generation sources. The deployment associated with market potential can be estimated through capacity expansion and dispatch modeling—for example, by using NREL’s Regional Energy Deployment System (ReEDS).

Development of a consistent method to estimate economic potential across renewable technologies began following the completion of a 2012 NREL analysis that assessed the technical potential of renewable generation technologies (Lopez et al. 2012). That report applied unifying assumptions and methods to generate comparable estimates across technologies and estimated technical potential to be many times greater than current U.S. electricity demand. Concurrently, sufficient data sets on renewable resources, avoided costs, and other parameters had become available for synthesis. This report describes the resulting geospatial analysis method and its initial application to estimate the economic potential of several renewable resources available for electricity generation in the United States using data available as of 2014. The method employs high-resolution geospatial data, including more than 150,000 technologyspecific sites in the continental United States, to reflect the significant variation in local resources, costs, and revenue potential.

The preliminary results of this application are intended to demonstrate the utility of the method described, and serve as an initial estimate of the range of economic potential, primarily from a 2014 perspective, as well as an exploration of the factors that influence that potential. These estimates are anticipated to change as technology cost and performance, expected revenues for any given location, and other factors change. This work represents an initial effort to develop and apply a method for assessing economic potential; future work may deliver different results as the method is further developed and refined…

For each of the above Primary Cases, an economic potential estimate range is established through varying assumptions of the applied capacity value of renewable generation. A major determinant of the capacity value is the extent to which additional generation capacity is required for the electricity system. In each of the Primary Cases, the low end of the estimated range of economic potential assumes that no additional capacity is required and reflects no credit for the capacity value of renewable generation in the avoided cost calculation. Conversely, the high end of each range assumes that additional capacity is needed on the system and reflects full credit for the capacity value of renewable generation in the avoided cost calculation.

Collectively, these Primary Cases rely on the following major assumptions:

• Construction Date: 2014 – Both the LCOE and LACE components of net value are calculated assuming a renewable generation project is constructed in 2014 (cost and value time streams that make up these components begin in 2014 and are discounted back to 2014). This approach enables a “current” view of economic potential based on existing 2014 marginal generation prices and existing forward projections of those prices. In contrast, as noted below, renewable technology costs for the Primary Cases are referenced to 2020. The combination of these two assumptions provides a blended view of economic potential illustrative of both the current environment and the near-term future. A sensitivity analysis explores a case with 2014 renewable costs and a 2014 construction date, as well as a case with 2020 renewable costs and a 2020 construction date.

• Renewable Technology Incentives: Permanent 10% ITC for UPV, DPV; Accelerated Depreciation (MACRS) – The inclusion of this level of ITC is intended to reflect a representation of existing federal law. As the current 30% ITC for solar technologies is scheduled to revert to the 10% level at the end of 2016, the “permanent” 10% level is used. The PTC is not included for wind as it required plant construction to begin by the end of 2013. Accelerated depreciation (MACRS) is assumed for all applicable technologies.

• Project Life: 20 years – Renewable generation plants are assumed to have a financial life of 20 years for the purposes of calculating LCOEs. LACE is estimated from marginal generation prices over this assumed 20-year asset life.

• Avoided Cost Method for Central Generation: MP – The MP method, based on a synthesis of locational marginal price data, is applied as a proxy for the revenue a centralized renewable project might receive in a given market. The capacity value component of avoided cost assumes a NGCT capital cost of $682/kW (consistent with AEO 2015).8 For DPV, local retail rates, together with full net metering where the customer is credited for any excess hourly generation at the applicable retail rate, are used as a basis for comparison to generation cost.

• Value of Avoided Health Costs: Not Included – Estimates of this type of external cost are not included in the primary cases as this impact of avoided cost was deemed secondary to consideration of the value of avoided CO2 emissions. Avoided heath costs are considered in a sensitivity case.

The following variables are differentially applied among the three Primary Cases:

• Value of Avoided CO2 Emissions (SCC): IWG (2013) Average SCC using a 3% discount rate – The value of avoided CO2 emissions is included in Primary Cases 2 and 3.

• Declining Value of Variable Generation: Included for Wind, UPV – Declining value is applied in the net value framework in Primary Case 3 that was designed to more broadly consider market effects. The application is made only to estimates for wind and UPV potential to reflect the possible impact of high levels of variable generation on project economics. This adjustment is not included for any DPV cases (no assumed change in value of solar with increasing DPV generation), given that the topic is an active area of research.

The sum of U.S. economic annual generation potential (excluding Alaska and Hawaii) for the six technologies assessed ranges from nearly 1,500 to 42,000 TWh in excess of 2013 generation for the Primary Cases. This range of aggregate potential represents from nearly three to nearly 80 times total U.S. renewable generation in 2013, or one-third to over ten times 2013 total U.S. generation from all sources, and is a small fraction of the aggregate annual technical generation potential of over 320,000 TWh for these technologies. These estimates simply sum the potentials of the individual technologies.

As such, they do not consider any potential competition among the technologies for available land or in economic terms. Further, they do not reflect any impact of the interaction of variable wind and PV generation upon the value of either technology.
More specifically, the following are ranges of aggregate annual generation potential for each the Primary Cases (see Table ES-1):

• Primary Case 2 - LACE including Value of Avoided External Costs (related to CO2 emissions): 13,000 – 42,000 TWh. Under this formulation, UPV contributes the bulk of the economic potential, particularly at the high end of the range. Wind economic potential is also significant, representing at least the equivalent of total U.S. generation from all sources in 2013.

• Primary Case 3 - LACE including Value of Avoided External Costs and Declining Value of Variable Generation: 1,500 – 2,000 TWh. While the total economic potential in this formulation is much lower than in Primary Case 2, all of the technologies except biomass contribute significant potential. The potential shown represents 35 – 50% of total U.S. generation from all sources in 2013. Figure ES-3 illustrates this economic potential is additive to existing (2013) generation. Figure ES-4 displays the distribution of economic potential for this Primary Case by state.

Individual technologies make the following contributions to aggregate Primary Case 3 results (see Figure ES-5 for potential by Census division):

• Wind is estimated to provide 550 – 870 TWh of annual potential in these cases, concentrated in the central part of the country (West South Central Census division). Significant amounts of existing generation also appear in the Pacific region.

• UPV is estimated to provide 430 to nearly 610 TWh of annual potential, which appears in Nevada and Texas (currently small in existing generation), Arizona, and along the Eastern seaboard, including South Carolina.

• Distributed PV (residential and commercial) is estimated to provide 190 to nearly 290 TWh of annual potential, which appears in the southwest (Pacific and Mountain Census division) and along the Eastern seaboard, consistent with existing generation.

• Hydropower is estimated to provide 64 to 76 TWh of annual potential, which appears in every Census division.

• Geothermal (hydrothermal resources only) is estimated to provide 130 – 150 TWh of annual potential, which appears only in the West (Pacific and Mountain Census divisions), consistent with the location of existing generation.

Biopower, specifically dedicated combustion plants with co-firing not included, shows no economic potential under this formulation.

The following general findings and trends are observed based on the above initial estimates and in the sensitivity analysis reported in the full text:

• The specific formulation of the economic potential metric is extremely important. Across the three distinct formulations of the definition used in this analysis, economic potential estimates varied by almost 30-fold. As with all metrics, care should be applied in definition and supporting details to avoid misleading conclusions.

• Estimates of economic potential are highly sensitive to the specific assumptions used related to both renewable generation supply and avoided cost. The capacity value of renewable generation, external costs and associated discount rates, and the declining value of variable generation with increased penetration have a major impact on estimates. The reference year for project construction, renewable technology costs, and the method and assumptions associated with the avoided cost of generation are other variables that have a significant effect on estimates.

• Economic potential appears in all states for at least one of the renewable generation technologies assessed, depending on the specific formulation of economic potential considered.

• Technology costs are a significant driver for economic potential, as seen in the sensitivity cases in Primary Case 3. Annual generation potential, assuming full credit for the capacity value for renewable generation, is the following for the corresponding assumed costs (highest to lowest costs): 250 TWh (2010), 820 TWh (2014), 2,000 TWh (2020 mid), and 3,100 TWh (2030 mid). Cost reductions already realized for renewable generation technologies between 2010 and 2014, particularly for wind and solar PV technologies, increase aggregate potential under this formulation by more than 200%.

• Despite recent growth, total renewable energy deployed overall remains small compared to the total technical potential, except for the relatively developed technologies of hydropower, geothermal, and biopower. For wind and distributed solar photovoltaics (DPV), a small amount of technical potential has been developed, and economic potential is significantly more than what has been deployed to date. For utility-scale photovoltaics UPV, technical potential is extremely large (greater than all other renewables together), and deployed and economic potential are small in comparison.

The spreadsheet-based model used to conduct this analysis is expected to be updated and refined to reflect new data and analysis as they become available. In particular, the use of wholesale market price data as a basis for a geospatial representation of avoided costs is an emerging area of analysis. Several improvement opportunities for the methodology, underlying data, and scenario analysis have been identified, which can be developed and applied in future updates…

Plug-in Hybrids: The Cars that will ReCharge America by Sherry Boschert: "Smart companies plan ahead and try to be the first to adopt new technology that will give them a competitive advantage. That’s what Toyota and Honda did with hybrids, and now they’re sitting pretty. Whichever company is first to bring a good plug-in hybrid to market will not only change their fortune but change the world."

Oil On The Brain; Adventures from the Pump to the Pipeline by Lisa Margonelli: "Spills are one of the costs of oil consumption that don’t appear at the pump. [Oil consultant Dagmar Schmidt Erkin]’s data shows that 120 million gallons of oil were spilled in inland waters between 1985 and 2003. From that she calculates that between 1980 and 2003, pipelines spilled 27 gallons of oil for every billion “ton miles” of oil they transported, while barges and tankers spilled around 15 gallons and trucks spilled 37 gallons. (A ton of oil is 294 gallons. If you ship a ton of oil for one mile you have one ton mile.) Right now the United States ships about 900 billion ton miles of oil and oil products per year."

NOTEWORTHY IN THE MEDIA:
NewEnergyNews would welcome any media-saavy volunteer who would like to re-develop this section of the page. Announcements and reviews of film, television, radio and music related to energy and environmental issues are welcome.

Review of OIL IN THEIR BLOOD, The American Decades by Mark S. Friedman

OIL IN THEIR BLOOD, The American Decades, the second volume of Herman K. Trabish’s retelling of oil’s history in fiction, picks up where the first book in the series, OIL IN THEIR BLOOD, The Story of Our Addiction, left off. The new book is an engrossing, informative and entertaining tale of the Roaring 20s, World War II and the Cold War. You don’t have to know anything about the first historical fiction’s adventures set between the Civil War, when oil became a major commodity, and World War I, when it became a vital commodity, to enjoy this new chronicle of the U.S. emergence as a world superpower and a world oil power.

As the new book opens, Lefash, a minor character in the first book, witnesses the role Big Oil played in designing the post-Great War world at the Paris Peace Conference of 1919. Unjustly implicated in a murder perpetrated by Big Oil agents, LeFash takes the name Livingstone and flees to the U.S. to clear himself. Livingstone’s quest leads him through Babe Ruth’s New York City and Al Capone’s Chicago into oil boom Oklahoma. Stymied by oil and circumstance, Livingstone marries, has a son and eventually, surprisingly, resolves his grievances with the murderer and with oil.

In the new novel’s second episode the oil-and-auto-industry dynasty from the first book re-emerges in the charismatic person of Victoria Wade Bridger, “the woman everybody loved.” Victoria meets Saudi dynasty founder Ibn Saud, spies for the State Department in the Vichy embassy in Washington, D.C., and – for profound and moving personal reasons – accepts a mission into the heart of Nazi-occupied Eastern Europe. Underlying all Victoria’s travels is the struggle between the allies and axis for control of the crucial oil resources that drove World War II.

As the Cold War begins, the novel’s third episode recounts the historic 1951 moment when Britain’s MI-6 handed off its operations in Iran to the CIA, marking the end to Britain’s dark manipulations and the beginning of the same work by the CIA. But in Trabish’s telling, the covert overthrow of Mossadeq in favor of the ill-fated Shah becomes a compelling romance and a melodramatic homage to the iconic “Casablanca” of Bogart and Bergman.

Monty Livingstone, veteran of an oil field youth, European WWII combat and a star-crossed post-war Berlin affair with a Russian female soldier, comes to 1951 Iran working for a U.S. oil company. He re-encounters his lost Russian love, now a Soviet agent helping prop up Mossadeq and extend Mother Russia’s Iranian oil ambitions. The reunited lovers are caught in a web of political, religious and Cold War forces until oil and power merge to restore the Shah to his future fate. The romance ends satisfyingly, America and the Soviet Union are the only forces left on the world stage and ambiguity is resolved with the answer so many of Trabish’s characters ultimately turn to: Oil.

Commenting on a recent National Petroleum Council report calling for government subsidies of the fossil fuels industries, a distinguished scholar said, “It appears that the whole report buys these dubious arguments that the consumer of energy is somehow stupid about energy…” Trabish’s great and important accomplishment is that you cannot read his emotionally engaging and informative tall tales and remain that stupid energy consumer. With our world rushing headlong toward Peak Oil and epic climate change, the OIL IN THEIR BLOOD series is a timely service as well as a consummate literary performance.

Review of OIL IN THEIR BLOOD, The Story of Our Addiction by Mark S. Friedman

"...ours is a culture of energy illiterates." (Paul Roberts, THE END OF OIL)

OIL IN THEIR BLOOD, a superb new historical fiction by Herman K. Trabish, addresses our energy illiteracy by putting the development of our addiction into a story about real people, giving readers a chance to think about how our addiction happened. Trabish's style is fine, straightforward storytelling and he tells his stories through his characters.

The book is the answer an oil family's matriarch gives to an interviewer who asks her to pass judgment on the industry. Like history itself, it is easier to tell stories about the oil industry than to judge it. She and Trabish let readers come to their own conclusions.

She begins by telling the story of her parents in post-Civil War western Pennsylvania, when oil became big business. This part of the story is like a John Ford western and its characters are classic American melodramatic heroes, heroines and villains.

In Part II, the matriarch tells the tragic story of the second generation and reveals how she came to be part of the tales. We see oil become an international commodity, traded on Wall Street and sought from London to Baku to Mesopotamia to Borneo. A baseball subplot compares the growth of the oil business to the growth of baseball, a fascinating reflection of our current president's personal career.

There is an unforgettable image near the center of the story: International oil entrepreneurs talk on a Baku street. This is Trabish at his best, portraying good men doing bad and bad men doing good, all laying plans for wealth and power in the muddy, oily alley of a tiny ancient town in the middle of everywhere. Because Part I was about triumphant American heroes, the tragedy here is entirely unexpected, despite Trabish's repeated allusions to other stories (Casey At The Bat, Hamlet) that do not end well.

In the final section, World War I looms. Baseball takes a back seat to early auto racing and oil-fueled modernity explodes. Love struggles with lust. A cavalry troop collides with an army truck. Here, Trabish has more than tragedy in mind. His lonely, confused young protagonist moves through the horrible destruction of the Romanian oilfields only to suffer worse and worse horrors, until--unexpectedly--he finds something, something a reviewer cannot reveal. Finally, the question of oil must be settled, so the oil industry comes back into the story in a way that is beyond good and bad, beyond melodrama and tragedy.

Along the way, Trabish gives readers a greater awareness of oil and how we became addicted to it. Awareness, Paul Roberts said in THE END OF OIL, "...may be the first tentative step toward building a more sustainable energy economy. Or it may simply mean that when our energy system does begin to fail, and we begin to lose everything that energy once supplied, we won't be so surprised."

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